All Forum Posts by: Todd Brittingham

Zubair,

You've received a lot of great information on this post, and as you can see investing out of state definitely has it's pitfalls. Rather than purchasing properties outright, have you thought about partnering with someone in the market you are looking to invest in?

We just launched a program that allows our clients to partner with us and earn a very nice return. The benefit to this is that you will have a partner on the ground with a vested interest in seeing your properties perform. This is a much different situation than purchasing properties outright because you bear the full risk of their performance after the purchase. Give it some thought and I'd be happy to answer any questions you may have...

Good Luck!

Yes I did Brian, you must have missed my point...

First off, answer the calls. The first contact with the tenant is a perfect opportunity for you to begin weeding out your tenants. You can begin to lay the groundwork for the expectations of your tenants, and get a pretty good feel from that initial discussion whether they are a good fit.

Also, regarding setting up showings, I would recommend you setup a rental open house. Prospective tenants are notorious for skipping out on showings and you can save yourself a lot of time if you set up multiple prospective tenants to meet you at the property at the same time. You may have some no-shows, but hopefully if you get 4-5 people to agree to come you will end up renting the property to one of them (assuming they meet your screening guidelines).

Good luck!

This post is a perfect example of why you should ALWAYS consult a professional to conduct repairs on your properties (personal or rental).

Here's the thing Scott, I can think of a lot of things to take up my time that are much more enjoyable than the frustration you must have had over this. Cutting your grass is one thing, but did that "Corroded Nut Driving You Crazy" really keep you sane this weekend?

When it comes to this sort of stuff, it's not that I can't do these sort of jobs...I don't want to do these sort of jobs. I'd rather spend time with my family on the weekends, or spend my time on higher-value activities like finding properties and putting deals together.

Those are the kinds of things that keep me sane.

First off, this is great to see! Alex I commend you for your level of interest in real estate at such a young age. This sounds like a very good deal, and my advice would be to talk it over with your dad. Perhaps he could partner with you or could help you find the partners needed to complete the deal. In any case, you're going to want to have a mentor involved (your dad or someone else) to help guide you through the ins and outs of such an investment.

Again, I commend you for taking this sort of initiative at such a young age, and I guarantee that if you continue to learn and about and invest in real estate you will be miles ahead of most people your own age. I only wishi I had the forsight at your age to begin investing in real estate.

Good luck! :D

I wouldn't be worried about the 5-day inspection period, but that sign makes me scratch my head...if this is a retail flip you have to ask yourself what kind of price reduction that sign will demand. I know I wouldn't want to live next to it...

I agree. Use a joint venture agreement with either the two of you as partners, or your two companies as partners. Profits would be split according to the agreement in the JV and the both of you would handle profits through either your company or personal tax returns.

Michael, I have no idea how to get ahold of US Bank, but maybe you can get the listing agent to call you first. Go put a note on the front door with your name and phone number on it. When the listing agent finally gets around to listing it there's a good chance they'll give you a call first. Let them know you'll be happy to work with them to write the offer so they will double dip the property and that might seal the deal.

Allison, you should really sit down with an attorney to discuss the implications of holding the property in your own name.

To answer your question briefly, the LLC acts as a barrier for you. If a situation arises with your property and a lawsuit is filed against you, the property and ALL of your personal assets would be at risk. However, if the property is in an LLC, only the property is at risk. Now there are some caveats to this, and that's where you need to speak with an attorney, but this is the basic reason for holding property in an LLC.

I'll also point out it works on the flip side as well. Say you get into an accident with your personal vehicle and injur someone. If you get sued and you owned the property in your name, that asset would be at risk. However, if it is owned in an LLC it would not. So, the LLC provides protection in this manner as well.

Again speak to an attorney but these are some good reasons why you should be holding your properties in an LLC rather than in your personal name.

George, I agree with everything you're saying and I've certainly seen a number of investors get burned by other companies. That's why we strive to educate our clients on how to invest from long distance the right way...this is why we put together all those videos I referenced earlier in the post. There are answers to each of your points to do things the right way...

1. Mediocre Rehab - Hire a 3rd party inspector to inspect the house. Again as a LDLL, you're going to want to build a team on the ground, and this includes multiple parties that will be able to tell you the truth of the situation. I recommend all of my clients find qualified inspectors not recommended by me to inspect the properties before purchase.

2. Neighborhoods...again, I encourage all of my clients to make a trip to see the neighborhoods and areas they will be investing in. Pictures online cannot do justice. We try our best to use videos to show all of our properties and the neighborhoods they sit in, but at the end of the day it's always better to visit the area yourself.

3. Guaranteed Rent - I don't understand why this implies the tenant is overpaying...if they were wouldn't they be more likely to skip out and find a cheaper place? This makes no sense.

4. Surcharges - read your contract with the PM. My PM does charge a fee for service calls, but I limit the maximum amount they can charge. However, this is negotiable with the property management company and you shouldn't sign a management agreement you're not comfortable with.

5. Breaking the PM Contract - I normally have a clause written into the property management agreement to allow EITHER party to break the break the contract at any point.

6. Overcharging for simple jobs - Again, this comes along with building the right team. This is another reason we encourage all of our clients to come visit us so they can meet our contractors, or find contractors they will deal with. Another way around this is to solicit multiple quotes for the jobs.

Here's the thing George, all of what you stated has happened to a lot of unsuspecting newbie investors. Rather than become part of the problem we're becoming part of the solution. As I've stated, we work with each of our clients to make sure they're set up correctly before they begin investing in properties, and we followup with them afterwards with any assistance they need. As an investor, that's what you should be looking for when investing with turnkey companies. If all their looking for is to get you to sign on the dotted line, then that's a big red flag and you should start asking more questions.